Social Security benefits are a vital lifeline for over 71 million Americans, including retirees, veterans, and their dependents. To ensure these benefits keep up with inflation, the Cost-of-Living Adjustment (COLA) was introduced in 1973 and has been applied since 1975. Each year, this adjustment helps protect the purchasing power of Social Security payments. For 2024, the COLA increase is 3.2%.
Estimated COLA
Looking ahead to 2025, current estimates predict a 2.57% increase in the COLA. This would mean an average boost of about $50 per month for Social Security recipients, according to the Detroit Free Press. However, the Seniors League's 2024 Loss of Buying Power study suggests this increase might not be enough. The study indicates that retirees would need an extra $370 per month to maintain the same purchasing power they had in 2010. It's important to note that this estimate doesn’t include potential rises in Medicare Part B premiums, which could further impact retirees’ budgets.
Social Security payments vary depending on several factors, such as years worked, total taxes paid, and retirement age. Here’s a snapshot of the current average payments:
Retired Workers: About $1,907 per month
Retired Couples (filing jointly): Around $3,303 per month
Survivor Benefits: Average of $1,509.50 per month
Spouses of Retired Workers: Average of $910 per month
Children of Retired Workers: Average of $892.39 per month
SSI Beneficiaries (Individuals): Average of $943 per month
SSI Beneficiaries (Couples): Average of $1,415 per month
As we approach 2025, keep an eye on updated forecasts and calculators to understand how the COLA adjustment might impact your Social Security benefits.
